Workers' compensation is an insurance program designed to pay benefits to workers who are injured within the course and scope of their employment

The Montana Workers' Compensation Act was passed by the legislature in 1915. The purpose of this Act was and still is to require this type of insurance coverage for all employees in Montana. All 50 states and all Canadian provinces have similar laws in place. This concept of insurance for injured workers came out of the Industrial Revolution, the first example having been developed in Germany.

The legislature passed the Occupational Disease Act in 1959. While the Workers' Compensation Act specifies an injury resulting from a single, identifiable incident, the Occupational Disease Act deals with injuries and illnesses which result from work-related trauma occurring over a period of time.

These two Acts combine to ensure that workers injured on the job receive prescribed medical and lost-time benefits. It is not the intent of either of these Acts to establish "fault," but to ensure benefits. Without such legislation, an injured employee would be forced to seek solutions through the court system, which can be extremely time consuming and often very costly.

Such insurance programs are also intended to protect the employer (policy-holder). Generally injured employees must seek benefits from the employer's workers' compensation policy. This "exclusive remedy" provision protects employers from paying unreasonable sums of money based on liability suits.

These programs, in most cases, pro-tect the employer against tremendous losses.

Though both the Workers' Compensation and Occupational Disease Acts require all employers to provide such insurance protection for their employees, neither of them specify where this insurance must be obtained The statutes provide alternative sources for coverage. The law refers to alternatives such as Plan Numbers 1,2, and 3.

Plan Number 1 allows the employer or association of employers to "self insure." In other words, an organization or association must provide all mandated benefits to injured workers from their own resources. There are a number of criterion which an employer or group must meet in order to be eligible to self insure. The Department of Labor and Industry approves self insurers.

Plan Number 2 allows the employer to purchase workers' compensation insurance from any of several "private" insurance providers. Such private carriers must meet all of the stipulations of the applicable laws.

Plan Number 3 refers to the State compensation Mutual Insurance Fund (State Fund). Until very recently, the State Fund was operated by the Workers' Compensation Division.

WHAT IS STATE FUND?

The State Compensation Mutual Insurance Fund (State Fund) is a nonprofit, independent public corporation set up as one option where employers can insure their liabilities under the Workers' Compensation and Occupational Disease Acts. The State Fund, as it now exists, was created by the 1989 Montana Legislature.

The State Fund must set rates on an actuarially sound basis to be neither more nor less than self-supporting. The State Fund must insure all employers who apply for workers' compensation coverage and insures all state agencies.

A number of policies and procedures have been adopted to carry out the responsibilities of the statutes. The entire operation has been reorganized to more closely mirror the functions and operations of private insurance carriers.

The Underwriting Department hired additional staff to allow for more timely and effective handling of various policy services functions. Our Safety staff has been increased to better and more effectively serve the loss prevention needs of the policyholders. Marketing efforts have been developed and implemented. The State Fund now provides its own auditing functions.

Several staff members have been added to the Benefits Department. Additional claims examiners have been hired to assure all required benefits are paid to injured workers in as timely and effective manner as possible. This action also allows for a more active approach in claims management. Rehabilitation coordinators have been added to the Benefits Department to ensure proper and quality rehabilitation services are provided within various cost containment guidelines.

All in all, we at the State Fund view the future in a most positive light. Every effort will be put forth to ensure the highest quality of services are provided to policy-holders and claimants at the lowest possible cost